Core Viewpoint - Fastly's shares have declined 26.4% year to date, underperforming the Zacks Internet Software industry's appreciation of 14.8% and the broader Zacks Computer & Technology sector's return of 5.7%, reflecting macroeconomic uncertainty and near-term softness in enterprise IT spending [1][2] Group 1: Company Performance - Fastly's strong partner ecosystem, expanding product portfolio, and consistent enterprise traction provide visibility into sustained execution, making the recent dip an attractive entry point for investors [2][17] - Fastly closed the first quarter of 2025 with 577 enterprise customers, contributing 93% of total revenue, and remaining performance obligations rose 33.5% year over year to $303 million [11][17] - The company expects revenues between $143 million and $147 million for the second quarter of 2025, indicating sequential growth from the March quarter, with a non-GAAP operating loss projected between $8 million and $4 million [15][17] Group 2: Product Innovations - Fastly continues to enhance its platform by introducing capabilities that address modern infrastructure challenges, evolving into a full-stack edge cloud platform [5][17] - New features include Client-Side Protection for browser-based security, expanded Bot Management capabilities, and HTTP Cache API support for programmatic cache control, improving developer experience and security [6][7][8] Group 3: Market Positioning - Fastly benefits from a rich partner base, including Microsoft, Alphabet, and Palo Alto Networks, enhancing its positioning in multi-cloud environments and security-led use cases [9][10] - Fastly shares are attractively valued, trading at a forward 12-month price-to-sales (P/S) of 1.63X, significantly lower than the industry's 5.76X [12][17] Group 4: Future Outlook - The company's stable second-quarter outlook and disciplined execution offer added visibility, with positive estimate trends supporting the case for accumulation [17][18]

Core Insights - Fastly (NYSE: FSLY) is experiencing a slowdown in top-line growth, a concern for investors since the end of the COVID-19 pandemic [1] Group 1 - The company has recently achieved an important milestone despite the growth slowdown [1]

Industry Overview - The Internet Software and Services sector is experiencing growth due to increased IT spending on solutions that support hybrid operating environments [1] - The Internet Software industry is ranked in the top 17% of Zacks Industry Rank, indicating an expectation to outperform the market in the next three to six months [2] Company Highlights UiPath Inc. (PATH) - UiPath offers an end-to-end automation platform with a range of robotic process automation solutions [6] - The platform includes AI, ML, and NLP capabilities, enhancing decision-making and information processing [7] - Expected revenue and earnings growth rates for the current year are 8.5% and 3.8%, respectively, with a 1.9% improvement in earnings estimates over the last week [8] Five9 Inc. (FIVN) - Five9 provides intelligent cloud software for contact centers, enabling a wide range of customer service functions [11] - The platform includes AI-driven features such as virtual agents and workflow automation, benefiting from the growing adoption of AI tools [13] - Expected revenue and earnings growth rates for the current year are 9.6% and 11.7%, respectively, with a 5.7% improvement in earnings estimates over the last 60 days [14] Fastly Inc. (FSLY) - Fastly offers infrastructure software for cloud computing, security, and edge computing solutions [15] - The Fastly AI Accelerator was introduced to optimize LLM generative AI applications [15] - Expected revenue and earnings growth rates for 2025 are 8.6% and 25%, respectively, with a 10% improvement in earnings estimates over the last week [17] Calix Inc. (CALX) - Calix provides cloud and software platforms for broadband service providers [18] - The company has integrated AI into its platforms to enhance operations and service delivery [20] - Expected revenue and earnings growth rates for 2025 are 7.1% and 65.4%, respectively, with a 21.1% improvement in earnings estimates over the last 60 days [20] Confluent Inc. (CFLT) - Confluent operates a data streaming platform that allows real-time data streaming for various industries [21][22] - Expected revenue and earnings growth rates for the current year are 19% and 24.1%, respectively, with a 2.9% improvement in earnings estimates over the last 60 days [23]

Financial Data and Key Metrics Changes - The preliminary results indicate that all nominees for the Board of Directors have been elected, and the ratification of Deloitte as the independent auditors for the current fiscal year has passed [11] - The compensation of named executive officers has been approved [11] Business Line Data and Key Metrics Changes - No specific data or metrics related to individual business lines were discussed in the meeting [10] Market Data and Key Metrics Changes - No specific market data or metrics were provided during the meeting [10] Company Strategy and Development Direction and Industry Competition - The meeting focused on the election of directors and the approval of auditor selection, with no detailed discussion on company strategy or competitive positioning [9][10] Management's Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during this meeting [10] Other Important Information - The meeting was conducted virtually, and stockholders were able to submit questions through a text box on the virtual meeting screen [8] - A complete list of stockholders entitled to vote was available online [5] Q&A Session Summary - There were no questions submitted during the Q&A session [10]

Core Viewpoint - The current volatile stock market presents a prime opportunity for long-term investors to capitalize on significant price declines in major stock indexes [1][2]. Group 1: Investment Opportunities - Pfizer has been added to the portfolio with a cost basis of $23.47 per share, despite a significant drop in sales from COVID-19 products, indicating a buying opportunity due to investor shortsightedness [5][6][8]. - PubMatic has seen a doubling of investment with a cost basis of $9.29, benefiting from the shift of advertising dollars to digital platforms and strong cash flow generation [9][10][12]. - Sirius XM Holdings was purchased at $19.28 per share, leveraging its subscription-based revenue model which provides stability during economic downturns [13][15][16]. - Intel was added at $18.56, with expectations of a turnaround in its business despite being late to the AI market, supported by strong cash flow from CPU sales [18][20][21]. - BioMarin Pharmaceutical was acquired at $56.01, focusing on ultrarare diseases with high pricing power and projected sales growth from its drug Voxzogo [22][25]. - Fastly was added at $5.08, with a focus on the growing demand for cloud services and a strong revenue retention rate, indicating potential for future profitability [27][29][30].

Fastly (FSLY) FY Conference Summary Company Overview - Fastly has transitioned from a content delivery network (CDN) to an edge delivery platform, focusing on delivering high-quality user experiences for applications, websites, and streaming services [6][8] - The company emphasizes partnerships with customers to provide fast, safe, and engaging web experiences [6] Key Points Business Model and Strategy - Fastly's edge platform includes content delivery, edge security (DDoS, bot mitigation, web application firewall), edge compute, and observability [7] - The transition to a full edge platform has diversified Fastly's customer base beyond media and publishing to include high-tech, retail, e-commerce, hospitality, and healthcare [8] - The company reduced revenue concentration from 40% in top 10 accounts to 32%, indicating a successful diversification strategy [10] - Fastly achieved 17% growth outside the top 10 accounts last quarter, showcasing the effectiveness of its platform expansion [10] Financial Performance and Margins - A more diversified customer base is expected to lead to improved margin potential and customer retention [12] - The exit of competitors like Edgio, StackPath, and Lumen has created a favorable pricing environment for Fastly, enhancing gross margins and customer loyalty [14] - Fastly's security portfolio is anticipated to increase customer stickiness and improve gross margins as more customers adopt multiple products [28] Cybersecurity Developments - Fastly invested heavily in R&D for cybersecurity in 2024, launching new products such as bot mitigation and a turnkey DDoS solution [16][17] - The company aims to enhance its go-to-market strategy with strong leadership in sales and marketing focused on security [17] - Fastly's web application firewall, developed from an acquisition, offers high efficacy and automatic protection, reducing total cost of ownership for customers [20] AI and Edge Compute Opportunities - Fastly is exploring opportunities in AI, particularly in AI bot detection and providing infrastructure for training datasets [30][31] - The company launched an AI accelerator to lower costs and improve response times for AI applications [32] - Fastly's edge compute market is growing, with a reported 67% growth in serverless compute using WebAssembly technology [38] Market Trends and Customer Focus - There is a growing demand for high-performance solutions that enhance user experience, which aligns with Fastly's offerings [39] - Traditional enterprises are increasingly investing in sophisticated digital experiences, driving growth in Fastly's compute services [42] Additional Insights - Fastly's focus on delivering a complete edge solution positions it well against competitors who have exited the market due to high customer concentration and reliance on CDN revenue [14] - The company's strategy to integrate security with delivery services is expected to create a more defensible business model over time [26] - Fastly's ability to provide a seamless experience for dynamic content at the edge is crucial for attracting new customers and retaining existing ones [40]

Industry Overview - The artificial intelligence (AI) investment trend in the United States remains strong, with significant capital expenditure planned for AI infrastructure development, amounting to $325 billion by 2025, reflecting a 46% year-over-year increase in spending on the AI ecosystem [1][2] Company Insights Innodata Inc. (INOD) - Innodata is positioned as a key player in the AI sector by providing essential data for training advanced language models, with a long-term growth outlook supported by increasing demand for data services [6][10] - The company has launched a Generative AI Test & Evaluation Platform, enhancing its AI service offerings, and is expected to benefit from the growing need for data engineering in large language model development [8][9] - Innodata's expected revenue growth rate is 40.3%, while earnings are projected to decline by 19.1% for the current year [11] Fastly Inc. (FSLY) - Fastly offers infrastructure software for cloud computing and has introduced the Fastly AI Accelerator, which optimizes generative AI applications for developers [12][13] - The company operates an edge cloud platform that enhances application performance, requiring minimal code changes for developers [13] - Fastly's expected revenue growth rate is 8.7%, with earnings growth projected at 16.7% for 2025, and earnings estimates have improved by 10% over the last 30 days [14] AeroVironment Inc. (AVAV) - AeroVironment specializes in robotic systems and services for government and commercial clients, integrating AI and computer vision into its products [15][16] - The company provides a range of unmanned systems and related services, primarily to the U.S. Department of Defense and allied governments [16][17] - AeroVironment's expected revenue growth rate is 26.1%, with earnings growth projected at 33.6% for the current year [18]

Core Insights - Cerby has announced a $40 million Series B funding round led by DTCP, with participation from existing investors including Okta Ventures, Salesforce Ventures, and Two Sigma Ventures [1][9] - The company aims to expand its identity security automation platform in response to increasing demand for solutions that secure disconnected applications [4][5] Company Overview - Cerby is the first platform to automate the full identity lifecycle for disconnected applications, covering aspects from credentials and authentication to lifecycle management and privileged access [3] - The platform integrates with existing Enterprise Password Management (EPM), Identity and Access Management (IAM), Identity Governance and Administration (IGA), and Privileged Access Management (PAM) systems, providing centralized access controls and automating manual security tasks [8] Market Demand - The proliferation of SaaS, cloud, mobile, and on-premise applications has significantly expanded the enterprise attack surface, increasing the need for scalable and advanced identity security solutions [2] - Cerby is focusing on growth in key markets such as Germany, France, the UK, and strategic regions in the Middle East, where regulatory pressures and enterprise complexity are driving demand for its solutions [5] Growth Metrics - Since its Series A funding round less than 20 months ago, Cerby has increased its Annual Recurring Revenue (ARR) by 10 times and expanded its customer base by 5 times, now automating identity workflows across more than 2,000 applications and supporting over 100 organizations globally [6]

Market Overview - The AI-driven bull run of 2023 and 2024 faced significant challenges in 2025 due to overstretched valuations, stock inflation, weak economic data, geopolitical conflicts, and concerns over the Trump administration's trade policies, impacting confidence in equities [1] - The technology sector, particularly AI-focused stocks, has been the most affected, but current low valuations present investment opportunities [2] Recommended AI Stocks - Five Internet-based AI stocks with favorable Zacks Rank recommended for purchase on the dip include Arista Networks Inc. (ANET), Fastly Inc. (FSLY), Five9 Inc. (FIVN), HubSpot Inc. (HUBS), and Twilio Inc. (TWLO), all carrying a Zacks Rank 2 (Buy) [3] Arista Networks Inc. (ANET) - Arista Networks is positioned well with a robust network architecture for cloud and AI networking, focusing on proactive products, zero-touch automation, and predictive operations [6] - The company’s AI suite enhances job monitoring and performance issue resolution, with expected revenue and earnings growth rates of 18.7% and 12.8% for the current year, respectively [8] - ANET is currently trading at a 31.6% discount from its 52-week high price [8] Fastly Inc. (FSLY) - Fastly provides cloud computing infrastructure and recently launched Fastly AI Accelerator, optimizing generative AI applications [10][11] - The company has expected revenue and earnings growth rates of 8.7% and 16.7% for 2025, respectively, and is trading at a 40.5% discount from its 52-week high price [12] Five9 Inc. (FIVN) - Five9 offers intelligent cloud software for contact centers, benefiting from the growing adoption of AI tools [13][15] - The expected revenue and earnings growth rates for the current year are 9.6% and 11.7%, respectively, with a 47.6% discount from its 52-week high price [16] HubSpot Inc. (HUBS) - HubSpot provides a cloud-based CRM platform and is experiencing steady adoption from enterprise customers, driven by its AI features [17][18] - The expected revenue and earnings growth rates for the current year are 15.4% and 14.9%, respectively, with a 30.2% discount from its 52-week high price [19] Twilio Inc. (TWLO) - Twilio focuses on generative AI offerings and has launched Customer AI technology to enhance customer engagement [20][21] - The expected revenue and earnings growth rates for the current year are 7.8% and 22.6%, respectively, with a 25.3% discount from its 52-week high price [24]

Group 1 - The current market environment is characterized by high volatility, creating a strong incentive for investors to actively manage their portfolios [1] - To outperform the stock markets, investors should consider overlooked stocks, especially in the small and mid-cap sectors [1] Group 2 - Gary Alexander has extensive experience in covering technology companies and advising startups, contributing to his insights on industry trends [2] - He has been a contributor to Seeking Alpha since 2017 and his work is featured in popular trading apps like Robinhood [2]